US Week in Review - Week ending 30 January 2014

    The US Week in Review highlights this week’s developments and emerging issues in the financial reporting world and gives you direct access to relevant technical accounting guidance and thought leadership produced by EY.

    What’s new from EY

    To the Point: PCC finalizes consolidation alternative and drops a proposal

    The Private Company Council modified its proposal to exempt private companies from evaluating certain common control leasing arrangements for consolidation under the variable interest entity guidance and sent it to the FASB for final endorsement. The PCC also dropped a proposal that would have allowed private companies to use a "combined instrument approach" to qualify for hedge accounting and discussed other projects.

    Our To the Point publication tells you what you need to know about the PCC meeting.

    Technical Line: Certain private companies can now use simplified hedge accounting

    Our Technical Line publication discusses new guidance from the FASB that makes it easier for certain private companies to qualify for hedge accounting for certain interest rate swaps. Eligible companies can assume that a hedging relationship is perfectly effective if certain conditions are met and can measure those swaps at settlement value rather than at fair value. They also have more time to complete formal hedge documentation.

    To the Point: Board issues final guidance for service concession arrangements

    The FASB issued final guidance stating that entities should not account for certain service concession arrangements entered into with public-sector entities as leases under ASC 840, Leases, and should not recognize the related infrastructure as property, plant and equipment. Instead, entities should refer to other US GAAP, such as ASC 605, Revenue Recognition, to account for these arrangements. While the final guidance is effective for annual periods beginning after 15 December 2014, early adoption is permitted.

    Our To the Point publication summarizes what you need to know about the new final guidance.

    Standard Setter updates

    Financial Accounting Standards Board (FASB)

    28 January 2014 meeting with the Private Company Council

    See our To the Point publication above.

    29 January 2014 FASB meeting

    The FASB discussed its projects on Consolidation: principal versus agent analysis and Accounting for financial instruments: classification and measurement.

    The Board also discussed its priorities for projects for the FASB and the EITF, voting to add a disclosure-only project on accounting for government assistance and to remove certain projects from the FASB and EITF agendas, including earnings per share and the short-term convergence project on income taxes. The Board also discussed adding certain projects to its research agenda.

    For additional details, see the FASB's Tentative Board Decisions and news release.

    Upcoming meetings and webcasts

    There are no public FASB meetings scheduled for the week of 3 February 2014.

    Education sessions

    See the FASB's calendar for upcoming education sessions. No decisions are made at these sessions.

    FAF names new chairman of FASAC

    The Financial Accounting Foundation (FAF) named Steven E. Buller chairman of the Financial Accounting Standards Advisory Council (FASAC). His term begins 1 February 2014. See the FAF's news release.

    FAF to provide up to $3M to support IASB on joint projects

    The FAF said it will contribute up to $3 million this year to the International Financial Reporting Standards Foundation to support the IASB's completion of joint projects with the FASB on revenue recognition, leasing, financial instruments (classification and measurement, and impairment) and insurance. The FAF previously contributed $500,000 in 2011. For additional details, see the FAF's news release.

    Securities and Exchange Commission (SEC)

    SEC to consider final rules on asset-backed securities and the 2014 PCAOB budget next week

    The SEC said it will hold an open meeting on 5 February 2014 to consider final rules that would require issuers of asset-backed securities to provide enhanced disclosures, including tagged data about individual assets underlying certain securitizations. The final rules also would revise the shelf offering process and eligibility criteria for asset-backed securities. The SEC also will consider the 2014 budget of the PCAOB and the annual accounting support fee paid by companies whose financial statements are audited by PCAOB-registered firms.

    International Federation of Accountants/International Auditing and Assurance Standards Board (IFAC/IAASB)

    IAESB issues new International Education Standards (IESs)

    The International Accounting Education Standards Board (IAESB) has issued the following three new International Education Standards (IESs):


    Upcoming Thought Center webcasts and podcasts

    CFO: need to know
    A quarterly webcast series
    5 March 2014, 12:00 p.m. Eastern time

    Considerations for a US IPO listing
    6 March 2014, 11:00 a.m. Eastern time



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